Evidence of Financial Crisis in the Banking Sector of the Republic of Kosovo
Evidence of Financial Crisis in the Banking Sector of the Republic of Kosovo

Summary/Abstract: Commercial banks in Republic of Kosovo have undergone major changes since the beginning of their establishment after the end of the war in 2000. Changes mainly resulted from technological changes, changes in the regulatory environment, the entry into the market of foreign capital banks and as a result of increased competition. Due to these changes, particularly as a result of the last global financial crisis in 2008, commercial banks in general were faced with rising operating costs, which may have affected their profitability, liquidity and credit quality. Our research evaluates the performance of commercial banks in the Republic of Kosovo during the period 2006 – 2012 by utilizing the method of financial ration analysis. We have also utilized the statistical t-test to analyze the impact of the recent global financial crisis on the performance of commercial banks in the Republic of Kosovo. The paper is organized as follows: Section 1 provides an analysis of the banking sector in Kosovo and macroeconomic indicators for the period analyzed. Section 2 provides a literature review on the performance of banks in other countries. Section 3 describes the research methodology and assumptions. Section 4 presents the results of research. While Section 5 consists of the summary of the research and provides our main conclusions.

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